ErikOk 10 Report post Posted February 3, 2012 I have a call in to my accountant, but I would like to find out what others on the forum are doing about getting an EIN for your LLC. I was told by my accountant to get an EIN in order to obtain a checking account in the name of the LLC and also avoid commingling my personal & LLC funds. In the IRS form it asks, "Indicate principal line of merchandise sold, specific construction work done, products produced, or services provided." And, on another line it asks: Check one box that best describes the principal activity of your business. ConstructionReal estateRental & leasingManufacturingTransportation & warehousingFinance & insuranceHealth care & social assistanceAccommodation & food serviceOther (specify)Wholesale-agent/brokerWholesale-otherRetail Reason I ask, is because I have read some information that says the IRS could brand you as a dealer and from that point there may be some tax consequences. Share this post Link to post Share on other sites
lhenley 8 Report post Posted February 4, 2012 I can't remember for sure, since I've had my LLC and EIN for several years, but I think I probably marked "Real Estate". Lynn (FL) Share this post Link to post Share on other sites
pilot76180 51 Report post Posted February 6, 2012 Just put real estate...BTW..getting your EIN should have been the VERY NEXT THING TO DO after you got your LLC. Like...the same day...everything is online now, so you just do it. I'm going to put together a new LLC for a different business, and I'm going to put it all together in a "business diary" so people can watch what I do, whether I fail or not. I think it will help people starting a business to see a diary. Share this post Link to post Share on other sites
ErikOk 10 Report post Posted February 6, 2012 Just put real estate...BTW..getting your EIN should have been the VERY NEXT THING TO DO after you got your LLC. Like...the same day...everything is online now, so you just do it. I'm going to put together a new LLC for a different business, and I'm going to put it all together in a "business diary" so people can watch what I do, whether I fail or not. I think it will help people starting a business to see a diary. Oh no, insights into the mind of John Jackson. This should be interesting Share this post Link to post Share on other sites
pilot76180 51 Report post Posted February 7, 2012 My mind is a terrible thing to waste..wheeeee Share this post Link to post Share on other sites
David Alexander 1 Report post Posted March 22, 2012 There isnt a single case out therewhere a real estate company hasbeen branded a dealer... Its most often the accountant labelingyou as a dealer instead of revampingyour entities and structure due to lackof knowledge... on how to dance aroundit... Share this post Link to post Share on other sites
bwalston 1 Report post Posted March 27, 2012 There isnt a single case out therewhere a real estate company hasbeen branded a dealer... That must be before the audit David, because I know of several instances where the IRS has usedan individual's or company's actions to brand them a dealer...[ Its most often the accountant labelingyou as a dealer instead of revampingyour entities and structure due to lackof knowledge... on how to dance aroundit... No, it's most often your activities and how you conduct them that label youa dealer... Dealers buy and sell properties, hopefully for a profit. They do so as quickly as possible.The key factor though is what they’re not — they’re not investors. You see, investors are long term while dealers are more the get in, get out ASAP variety.By the very nature of their activities, wholesalers, rehabbers, and yes, those of us whodo CAs are dealers whether we like it or not. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted March 27, 2012 Technically you are probably correct, Bill. But realistically, I think it would take a hell of a lot of wheeling and dealing volume to attract the attention of the IRS. Share this post Link to post Share on other sites
bwalston 1 Report post Posted March 27, 2012 Technically you are probably correct, Bill. But realistically, I think it would take a hell of a lot of wheeling and dealing volume to attract the attention of the IRS. It's not really a matter of attracting the attention of the IRS. It's more of a matter of how you report your income for tax purposes. Investors who sell their property pay capital gains taxes on their income. Wholesalers report their assignment fees as ordinary income. Rehabbers treat their property as inventory and report their profits as ordinary income. And a non-refundable option fee that we receive in a cooperative assignment is ordinary income. My point is that "dealer" is not a classification that is determined by the IRS. It's determined by your real estate activity. Share this post Link to post Share on other sites